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Instruction Apply the operations strategy framework to IKEA: IKEA is a Swedish furniture supplier that sells much more than furniture through its stores in 41 countries and relies on self-service in the store and self-assembly at home. Their website has links that include, for example, the concept and design of IKEA, which you may find useful in identifying the order qualifiers and winners that the company offers its target customers and from which you can infer the trade-offs that Ikea is making and the operations capabilities that it is pursuing. Refer to the concept of order qualifiers and winners (price, product features, etc.) that we have studied, and identify three order qualifiers and winners for customers of Ikea. In addition, consider what trade-offs the company is making – what aspects (price, product features, etc.) that the broader market for their products may care for is Ikea not providing? Support your response with facts, and clearly state the sources for the facts, which may include your experience as a customer of the company. Based on the information about their market and order qualifiers and winners for their customers, identify what operations capabilities (cost efficiency, conformance quality, etc.) Ikea is pursuing or should be pursuing. Please connect the capabilities that you mention with the order qualifiers and winners that you have identified. Referring to the operations strategy implementation decision areas (e.g., location, employee salaries and incentives, etc.) that we have studied, explain the decisions that you would make to achieve the operations capabilities you have selected, e.g., where would you locate their facilities? Please provide the reasoning for your choices, e.g., how would store location decision impact the operations capability of quick delivery? Due to my am not a staff of IKEA and went there few years once. Here I only give some own opinion and recall the story of the IKEA about the business operatonal concept of IKEA. Kindly correct me if there has any wrong. It’s useful to record some information about how your file was created. [1] “2016-06-06 23:43:05 JST” setting value Firstly, I do appreciate that University of Illinois at Urbana–Champaign provides the management course via Coursera. I like reading the legend of business tycoons (for example: Konosuke Matsushita, Peter Drucker, Bill Gates, Warrent Buffet, George Soros, Jim Rogers, Lee Kah Sheng, Henry Fok Ying Tung, Peter Lynch, Lim Goh Tong etc) to know how was their mindset and business strategy since I was a computer science student in Tunku Abdul Rahman College. I used to read the legend of Ingvar Kamprad and just recall it. 宜家为何“永远不会上市”? roughly eleborate the background of the IKEA. There has another business legend from China which has own electronical business emperor although backcrupcy and had been jailed since few years ago. You might read 揭秘资本大鳄黄光裕的发家史–国美电器 for further details.Operations Management : Module 1 Assignment 1
Improving Business Finances and Operations Specialization by University of Illinois at Urbana-Champaign
®γσ, Eng Lian Hu
白戸則道®2016-06-06
1. Introduction
2. Operational Concepts
Part 1
Part 2
Part 3
3. Conclusion
4. Appendices
4.1 Documenting File Creation
version R version 3.3.0 (2016-05-03) system x86_64, mingw32
ui RTerm
language (EN)
collate English_United States.1252
tz Asia/Tokyo
date 2016-06-06
sysname release version nodename “Windows” “10 x64” “build 10586” “RSTUDIO-SCIBROK” machine login user effective_user “x86-64” “scibr” “scibr” “scibr”
4.2 Versions’ Log
4.3 Speech and Blooper
Instructions The purpose of this assignment is to give you the opportunity to apply the concepts you have learned in this module and to discuss some of the key ideas of the module in your own words. Follow the instructions provided and respond to each question. This a required activity for this module. Submit your answers to each of the questions based on the information provided below. Enter your answers directly in the spaces provided in the My submission tab. You may save a draft of your work as you go, and you can come back later to continue working on your draft. When you are finished working, click the Preview button, verify your identity, and then click Submit for Review to submit your assignment. Please answer each question fully and concisely. The discussion of the assignment solution is provided in the Module 1 Assignment 2 Solution video. Do the assignment on your own first, before viewing the assignment discussion video! Module 1 Assignment 2 Following are the relevant figures extracted from the balance sheet and income statement of two companies, a consumer electronics manufacturer and a large retailer. Table 1.1 : Comparison of relevant information of balance sheet and income statement from two companies. Table 2.1 : Comparison of Asset-Turnover of two companies. What is ‘Asset Turnover Ratio’? Asset turnover ratio is the ratio of the value of a company’s sales or revenues generated relative to the value of its assets. The Asset Turnover ratio can often be used as an indicator of the efficiency with which a company is deploying its assets in generating revenue. \(Asset Turnover = Sales or Revenues / Total Assets\) Generally speaking, the higher the asset turnover ratio, the better the company is performing, since higher ratios imply that the company is generating more revenue per dollar of assets. Yet, this ratio can vary widely from one industry to the next. As such, considering the asset turnover ratios of an energy company and a telecommunications company will not make for an accurate comparison. Comparisons are only meaningful when they are made for different companies within the same sector. Read more: Asset Turnover Definition | Investopedia Table 2.2 : Comparison of Operating-Margin of two companies. What is an ‘Operating Margin’? Operating margin is a margin ratio used to measure a company’s pricing strategy and operating efficiency. Operating margin is a measurement of what proportion of a company’s revenue is left over after paying for variable costs of production such as wages, raw materials, etc. It can be calculated by dividing a company’s operating income (also known as operating profit) during a given period by its net sales during the same period. Operating income here refers to the profit that a company retains after removing operating expenses (such as cost of goods sold and wages) and depreciation. Net sales here refers to the total value of sales minus the value of returned goods, allowances for damaged and missing goods, and discount sales. Operating margin is expressed as a percentage, and the formula for calculating operating margin can be represented in the following way: \(Operating Margin = Operating Income / Net Sales\) Operating margin is also often known as operating profit margin, operating income margin, return on sales or as net profit margin. However, net profit margin may be misleading in this case because it is more frequently used to refer to another ratio, net margin. Read more: Operating Margin Definition | Investopedia Table 2.3 : Comparison of Return-On-Equity of two companies. What is ‘Return On Equity - ROE’? Return on equity (ROE) is the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested. ROE is expressed as a percentage and calculated as: \(Return on Equity = Net Income/Shareholder's Equity\) Net income is for the full fiscal year (before dividends paid to common stock holders but after dividends to preferred stock.) Shareholder’s equity does not include preferred shares. Also known as return on net worth (RONW). Table 2.4 : Comparison of Operations Performance of two companies. We can compare the companies above to know that :- Case Study : I used to work as a customer service operator in Ladbrokes Far East Asian department (Scicom MSC Bhd) and now I’ve affiliate business partnership with Ladbrokes and some other companies. From my personal view, I try to separate the digital business and brick-and-mortar retailing outlet of Ladbokes as example. I assume that Consumer Electronic is digital business operates around the World while Large Retailer is the outlets which operates within Europe. There has only few importance figures took into counting in this assignment. If both balance sheet and income statement of a company is not faud, the operational perforamce might reflect the healthiness of a company. We/Investors can easily know the potential of growth/profitable, if the company is overvalued or undervalued and if it is worth or valued to invest their fund. There are a lot of figure that has not been states while it can be analysed and know the intrinsic value which is always quote and measure by Warren Buffet. - Warren Buffett: How He Does It? - Buffett’s Value Formula (?) - How does Warren Buffett value a business? It’s useful to record some information about how your file was created. [1] “2016-06-06 23:45:02 JST” setting value Same as pevious assignment — Operations Management : Module 1 Assignment 1, I do appreciate that University of Illinois at Urbana–Champaign provides the management course via Coursera. I like reading the legend of business tycoons (for example: Konosuke Matsushita, Peter Drucker, Bill Gates, Warrent Buffet, George Soros, Jim Rogers, Lee Kah Sheng, Henry Fok Ying Tung, Peter Lynch, Lim Goh Tong etc) to know how was their mindset and business strategy since I was a computer science student in Tunku Abdul Rahman College. I used to read the legend of Warren Buffet and then started my journey in financial market before join sportsbook industry.Operations Management : Module 1 Assignment 2
Improving Business Finances and Operations Specialization by University of Illinois at Urbana-Champaign
®γσ, Eng Lian Hu
白戸則道®2016-06-06
1. Introduction
Category
Consumer.Electronics
Large.Retailer
Sales
$108,249
$446,950
Earnings
$ 25,922
$ 15,699
Assets
$116,371
$193,406
Equity
$ 76,615
$ 75,761
2. Operational Concepts
2.1 Compute the asset turnover for each company.
Category
Consumer.Electronics
Large.Retailer
Sales
$108,249
$446,950
Assets
$116,371
$193,406
Asset Turnover
93.02%
231.09%
2.2 Compute the operating margin for each company.
Category
Consumer.Electronics
Large.Retailer
Earnings
$ 25,922
$ 15,699
Sales
$108,249
$446,950
Operating Margin
23.95%
3.51%
2.3 Compute the return on equity for each company.
Category
Consumer.Electronics
Large.Retailer
Earnings
$ 25,922
$ 15,699
Equity
$ 76,615
$ 75,761
Return of Equity
33.83%
20.72%
2.4 What does your analysis suggest about the differences in operations performance of the two companies?
Category
Consumer.Electronics
Large.Retailer
Asset Turnover
93.02%
231.09%
Operating Margin
23.95%
3.51%
Return of Equity
33.83%
20.72%
3. Conclusion
4. Appendices
4.1 Documenting File Creation
version R version 3.3.0 (2016-05-03) system x86_64, mingw32
ui RTerm
language (EN)
collate English_United States.1252
tz Asia/Tokyo
date 2016-06-06
sysname release version nodename “Windows” “10 x64” “build 10586” “RSTUDIO-SCIBROK” machine login user effective_user “x86-64” “scibr” “scibr” “scibr”
4.2 Versions’ Log
4.3 Speech and Blooper
Instructions The purpose of this assignment is to give you the opportunity to apply the concepts you have learned in this module and to discuss some of the key ideas of the module in your own words. Follow the instructions provided and respond to each question. This a required activity for this module. Submit your answers to each of the questions based on the information provided below. Enter your answers directly in the spaces provided in the My submission tab. You may save a draft of your work as you go, and you can come back later to continue working on your draft. When you are finished working, click the Preview button, verify your identity, and then click Submit for review to submit the assignment. Please answer each question fully and concisely. The discussion of the assignment solution is provided in the Module 2 Assignment 1 Solution video. Do the assignment on your own first, before viewing the assignment discussion video! Module 2 Assignment 1 Renovation Homeware has been manufacturing dining room furniture for several furniture outlets in the U.S. since 1969. The company is known for their dining room sets – tables, chairs, consoles, and sideboards – in which they offer tremendous choices and allow customization for dimensions, wood finish, upholstery, and fittings. The average promised lead time for their orders is eight weeks. Until recently, they were able to provide delivery within the promised due dates for 99.2% of orders, with an occasional slipup causing orders to be at most five days late. However, in the past two years, over 33% orders have been over three weeks late, leading to several complaints from buyers. Renovation prides itself on the quality of the furniture they produce and their willingness to incorporate requests for changes until the last possible time until the order is released to production. Their manufacturing operation is set up by departments. Wood cutting, upholstery storage and cutting, assembly, hardware fitting, polishing, finishing, inspection, and packaging are organized as separate mini-shops, and furniture makes its way through these departments as needed. A sophisticated scheduling system helps them keep track of due dates and job schedules. There has been a shift in the mix of orders for Renovation, and this shift appears to mirror a change in the customer mix. Compared to two years ago, order sizes of 1 to 5 sets of one type have been reduced to half of what they used to be, while order sizes of 45–50 sets of one type with hardly any customization have nearly doubled. The customer mix now includes more retail chains, besides the traditional boutique stores and interior designers. As a sign of this increasing trend, one of Renovation Homeware’s major customers, Eat-In Dining Rooms, recently contacted them with a potential order of 125 single type of dining room sets for their newly expanded stores and warehouses in the Midwestern U.S. This order is for one of the cheaper sets that Renovation makes and requires no other customization other than two wood finish types in the mix. Until now, Eat-In’s order quantities for any one set had been quite small, with the largest order size being 5, even when the total order was for a larger quantity of up to 100. For the current large-volume order, Eat-In is demanding a shorter lead time of six weeks and is pushing for a discounted price, citing the large quantity of the same set as a reason. Such demands for price discounts have also been brought up recently by buyers for several other furniture outlets, although it has never been an issue in the past. The production manager for Renovation, Cynthia Natarajan, is in a fix. On the one hand, there is the potential for increasing sales by accepting large orders of identical sets, albeit at discounted prices. On the other hand, she has longstanding customers of customized sets complaining about slipping on delivery dates and workmanship. She is also not sure how she can provide the high volume orders at shorter lead times. The marketing manager, Vera DeLillo, believes that customers deserve the quantity discounts for larger orders and does not see why Cynthia is not able to extract efficiencies from large volumes of the same sets as well as provide products more quickly than before. Cynthia believes that there are some long-term operations strategy decisions that need to be made and that may need investments in the production process. She has scheduled a meeting with the marketing manager, Vera DeLillo, and the managing director, Gene Phang, to explain, from an operations management perspective: The causes of the current delivery date problems and the challenges in accepting the new large-volume orders with the current process design A proposed process design for accepting the new large-volume orders while continuing to serve the remaining customized orders customers. Other solutions for consideration that would require a shift in overall business strategy Based on general guidelines about matching process arrangements to product requirements, please help Cynthia Natarajan put together information on all three topics. Discuss the causes of the current delivery date problems and the challenges in accepting the new large-volume orders with the current process design. Let’s summarise the problem, the previous orders might a lot of scattered customers who order 1-5 sets but now the orders by wholesalers/retailer chain for 45-50 sets have blooming. We can know the company is small but not a huge business group since previously majority orders are 1-5 sets but recent 2 years became mostly on 45-50 sets and maximum 100 sets. The customization request from customers became more complicated due to high volume and diversified designs. Propose a process design for accepting the new large-volume orders while continuing to serve the remaining customized orders customers. Customization Service to Customers Table 2.1: Sample table of customization service Above is a sample table to differentiate the customization service provides to customers based on different Order Amount, The allowed days for customization count from the date of signed order. The estimated delivery time (in week unit) is count from the date of signed order. Due to I never work in furniture industry and unable to estimate the delivery time, here I simply set a time duration for sample only. Discuss other solutions for consideration that would require a shift in overall business strategy. I tried to write my answer above based on my understanding on the assignment prior to watch below video. I do say sorry since my Enlish language is not good. Below is the answer from my peers. Kindly refer to below answer provided by Professor. It’s useful to record some information about how your file was created. [1] “2016-06-18 08:40:17 JST” setting value Same as pevious assignment — Operations Management : Module 1 Assignment 1, I do appreciate that University of Illinois at Urbana–Champaign provides the management course via Coursera. I used to work in FujiXerox as customer service operator for one month and learnt the logistics for printer service maintanance around Taiwan province. Besides, I learnt some knowledge about sales-stocks flowchart when I work as a salesman in Maybooks few month ago. I am a newbie in marketing, cost measurement and inventory management as well as whole operating chain. Keep up learning and hope to learn some management skills and knowledges from Operations Management.Operations Management : Module 2 Assignment 1
Improving Business Finances and Operations Specialization by University of Illinois at Urbana-Champaign
®γσ, Eng Lian Hu
白戸則道®2016-06-18
1. Introduction
2. Operational Concepts
Part 1
Part 2
Order.Amount
Number.of.Allowed.Customization
Allowed.Customization.Days.In.Advance
Estimated.Delivery.Time.in.Week
(1,5]
0
0
1
(5,10]
0
0
1
(10,15]
0
0
1
(15,20]
0
0
1
(20,25]
0
0
2
(25,30]
1
0
2
(30,35]
1
0
2
(35,40]
1
0
2
(40,45]
1
1
3
(45,50]
1
1
3
(50,55]
2
1
3
(55,60]
2
1
3
(60,65]
2
1
4
(65,70]
2
1
4
(70,75]
3
1
4
(75,80]
3
2
5
(80,85]
3
2
5
(85,90]
4
2
5
(90,95]
4
2
6
(95,100]
4
2
6
>100
unlimit
2
7
Part 3
3. Conclusion
Part 1
Discuss the causes of the current delivery date problems and the challenges in accepting the new large-volume orders with the current process design.
The causes of the current delivery date problems are below highlighted:-
- Company’s existing capabilities and product requirements by customers is in misalignment and late delivery being the consequence.
- Existing process design cannot effectively address customer varying needs.
- Orders traffic has increased considerably in recent times especially for standardized products and therefore affecting the lead time.
The challenges in accepting the new large-volume orders with the current process design are:-
- Inevitable late delivery.
- Total system constraint as the job shop environment is not designed for large repetitive production system.
-Job shop is characterized by high-mix, low-volume production, therefore difficulty in maintaining large quantity of raw material inventories may be experienced.
-Overtime may be invoked so as to meet delivery schedules.
-Paradigm shift to batch arrangement from make-to-order demand driven business model might not be feasible overnight.
Part 1 is worth 5 points total. Points are only given for correct/reasonable answers in the manner specified below; incorrect/unreasonable answers get zero points.
- 0 pts No answer, or irrelevant answer
- 1 pt Superficial mention of one process design aspect or operations strategy concept applicable to the question
- 2 pts One specific process design aspect or operations strategy concept correctly covered in the answer, with specific connection to the context of the case
- 3 pts Superficial mention of another (beyond the one mentioned for first 2 points) process design aspect or operations strategy concept applicable to the question
- 4 pts Two specific process design aspects or operations strategy concepts correctly covered in the answer, with specific connections to the context of the case.
- 5 pts Appropriate tie back to the larger problems of the company.
Part 2
Propose a process design for accepting the new large-volume orders while continuing to serve the remaining customized orders customers.
Propose a process design is as follows:
- On the same facility run job shop for high-mix, customized, and low production items and on the other hand, batch for standardized high volume items, while minimizing change over time.
- Without investing more on assets and labor force, adopt ‘make to stock’ for the large volume orders and then ‘make to order’ for the customized product as appropriate.
Part 2 is worth 5 points total. Points are only given for correct/reasonable answers in the manner specified below; incorrect/unreasonable answers get zero points.
- 0 pts No answer, or irrelevant answer
- 1 pt Superficial mention of one process design aspect or operations strategy concept applicable to the question
- 2 pts One specific process design aspect or operations strategy concept correctly covered in the answer, with specific connection to the context of the case
- 3 pts Superficial mention of another (beyond the one mentioned for first 2 points) process design aspect or operations strategy concept applicable to the question
- 4 pts Two specific process design aspects or operations strategy concepts correctly covered in the answer, with specific connections to the context of the case
- 5 pts Appropriate tie back to the larger problems of the company
Part 3
Discuss other solutions for consideration that would require a shift in overall business strategy.
Settle for Standard items production while giving up on customized items:
-Since the company has potential to fulfill large order at low price, the production line can be reconfigured to serve such purpose all things being equal.
-Low skilled workforce can be injected into the system to optimize output at low cost.
-Efficiently utilize all available resources with quality in focus for enhanced customer experience.
-Large inventory of raw material will result in lower production cost.
Settle for customized items while trading off Standard items:
-Optimize existing capabilities to serve your customers better.
-Improve on job shop arrangement to engender a shorter lead time.
-Reduces non value adding activities to enable accurate promise delivery date to customers.
-Ensure material is always available as it is a critical factor on the job loading time and production lead time.
Part 3 is worth 5 points total. Points are only given for correct/reasonable answers in the manner specified below; incorrect/unreasonable answers get zero points.
- 0 pts No answer, or irrelevant answer
- 1 pt Superficial mention of one process design aspect or operations strategy concept applicable to the question
- 2 pts One specific process design aspect or operations strategy concept correctly covered in the answer, with specific connection to the context of the case
- 3 pts Superficial mention of another (beyond the one mentioned for first 2 points) process design aspect or operations strategy concept applicable to the question
- 4 pts Two specific process design aspects or operations strategy concepts correctly covered in the answer, with specific connections to the context of the case.
- 5 pts Appropriate tie back to the larger problems of the companyPart 1
Discuss the causes of the current delivery date problems and the challenges in accepting the new large-volume orders with the current process design.
The causes of the current delivery date problems are due to change in customer's expectations and problem in old production process which do not have provision to equip the changes in expectation. Previously the customers where expecting 1 to 5 customized sets and were willing to wait for certain amount of time. Now the no.of customized sets they are expecting is increased and they wanted the product to be delivered earlier. Also Previously the bulk orders like 20 to 50 sets were received half ordered. However, now due to the increased retail chains the bulk orders placed are doubled and they are expecting discount as they are ordering same product in bulk or high volume with earlier delivery requests.
The challenges in accepting the new large-volume orders with the current process design is there is no enough automation, or not much provision to release products in batch rather than in-line and no machinery has ability to address the change in volume order production and also the employees who creates the products skill were not put in a platform to well utilize their skills in a versatile fashion.
Part 1 is worth 5 points total. Points are only given for correct/reasonable answers in the manner specified below; incorrect/unreasonable answers get zero points.
- 0 pts No answer, or irrelevant answer
- 1 pt Superficial mention of one process design aspect or operations strategy concept applicable to the question
- 2 pts One specific process design aspect or operations strategy concept correctly covered in the answer, with specific connection to the context of the case
- 3 pts Superficial mention of another (beyond the one mentioned for first 2 points) process design aspect or operations strategy concept applicable to the question
- 4 pts Two specific process design aspects or operations strategy concepts correctly covered in the answer, with specific connections to the context of the case.
- 5 pts Appropriate tie back to the larger problems of the company.
Part 2
Propose a process design for accepting the new large-volume orders while continuing to serve the remaining customized orders customers.
Even without giving too much specific information about how they would be arranged they can think of their manufacturing shop to be arranged in a job shop kind of environment, with different departments doing different things, as needed, for different types of designs, for different types of dining room sets. So what goes with the job shop is the idea of flexibility in volumes, and accepting changes. And then, they can also think of other features about a job shop, like skilled labor, like the idea of not thinking too much about change over times, and also the idea of being able to expand capacity in small chunks. So that would be something that they would be able to do in a job shop.
Also the fact that now they would have to do a lot of changeovers between high volume and low volume orders would mean that the low volume orders would get stuck behind large volume orders and then the large volume orders would have to be broken up because otherwise they are keeping the low volume orders behind for a longer period of time. So there would be an increase in that sense in the number of changeovers that they would be doing. Even for the same product for a high volume order, they would have to do more changeovers. It would be definitely challenging in terms of scheduling for the same reasons
In terms of the value of skilled labor, as they are getting orders of increasing volume and they're trying to make more standardized stuff they have skilled labor who's talents are being wasted when they're making the same product over and over again. Very standardized product that doesn't need too much customization. So, in that sense their costs are going to remain high while the customers are asking for lower prices. And the idea of expanding capacity is very different when they think about a job shop environment, versus when they want to do it for high volume. Thinking about expanding capacity for a job shop meaning that they would have to add specialized equipment in each department if they wanted to increase the total volume. And even if they were to do that in small increments, it would turn out to be very expensive because they're not thinking of things like automation, things like taking stuff through in quick flow time. they're not going to be able to get cost effective in terms of expanding their capacity. As, the new customers are wanting high volume, lower prices and as they want discounts in their prices, and they want quick lead times.Maybe they don't have enough volume for going for a line kind of arrangement, but definitely more like a batch. More something like where they are having at least some steps that are put into a line, or a line that they are changing over between different types of products so that they can take advantage of the high volumes, and get them to flow through the process much quicker then they would in a job shop, where they would have jumbled flows. The process arrangement would be more like a batch. It would be more with longer runs. They could focus on the idea of fewer set ups and try to optimize, take that set up and that they might have and use it over a larger production run that they would do so that they are spreading that fixed cost over a larger number of units. They should be focusing on that, or Renovation should be focusing on that. They should seek opportunities for automation taking the artistic perspective out of the picture in some sense at least to some extent because customers are not demanding it. So the skilled labor coming out and the automation going in, at least for some parts of the process. They will need to be focusing more on conformance to specifications. When customers want a high volume product, they're expecting standardized product. They want product to look alike. They're going to accept orders based on something that's in the show room and then what gets delivered should be more or less similar to what they saw in the showroom. So the focus has to shift from it being creativity and making different types of units to making conforming to specifications that the customer has. And finally, they would have to give up this idea of flexibility in terms of letting customers make changes until the last minute. They would have to freeze the production schedule, otherwise, again going back to the idea of changeovers, they would be hit with a lot of changeovers. So they would have to have this idea of focusing on freezing the production schedule. And saying, look, you have to tell us in advance how many products of what kind you need. And then what would happen is that some of the customers who were earlier able to make the changes might not be happy. But this is something that they need to think about if they're going to think about serving those customers that want high volume and lower prices.
For good process design, One is the idea of a plant within a plant. We can have the idea of a certain part of the machine, the shop having a job shop kind of arrangement, whereas a certain part of the manufacturing shop having a batch kind of arrangement. That gives some advantages in terms of sharing of knowledge. Need to use the job shop for customized and need to use the batch for high volume. So that would be one design, a plant within a plant kind of an arrangement.
Both of them are made pretty much under the same roof, but they have very distinct processes separated from each other, although, there is some sharing of knowledge and some sharing of competencies between those two processes as well. So, that would be one arrangement that they could use that they could consider if they wanted to go after both of these customer segments, go after the order winners and qualifiers of both these customer segments.
The second arrangement that they could have thought of is maybe think of splitting the process, So the idea of having a made to stock arrangement up to a certain extent, and then maybe continuing with a high volume for the for the standardized products and then having a job shop for the customization for the products that are going to be customized. Now this would need some type of adjustment to the expectations that the customers have, what kind of customization you would be able to offer. It should not go all the way back into the process. So they can push product all the way to a certain extent based on made to stock, or having a standardized product more like a standardized product to a certain extent. Then, from then on, getting it customized based on whatever the customer wants. So these are two possible combinations that they could have thought of and both should, in theory, be able to work if Renovation would decide to go after both types of customers.
So earlier when they're talking about customized product making it specifically for certain customers and having a flexible process, their purchases may not have been very high volume. They may not have thought about it too much. MRP system or an ERP system that helps them schedule better. Enterprise Resource planning system or manufacturing resource planning system that helps them plan better based on what is the demand of that parent product and breaking it down to the different sub assemblies that are needed and sending the orders out to different departments that need to make those sub assemblies so that the final product can be assembled. That's something that they would have to think about, based on this high volume market that seems to be coming up at a faster rate. Forecasting off of production volumes, what kind of volumes are they expecting would be needed in order to make investments into large volume kind of automated batch systems or line systems. They would have to at least limit the number of designs that they would offer. Based on different process arrangements based on we said either, we need to adjust the expectations of customers at least to some extent. So Renovation might have to do that to some extent. They may have to go back to the design process for designing their furniture and think about more modular designs and part commonalty. They can have certain types of assemblies, sub assemblies, in stock, that they can combine in different ways based on the orders that they get, and that they can store, that they can keep in stock whenever they have slack times from their large volume lines.
They can focus on reducing the changeover time. That would be useful in terms of being able to have a line that is high volume, at the same time not that inflexible in terms of changeover. And then they would also have to think about their employees in terms of the skill of the employees and what kind of skill set they would expect their employees to have. So those would be some process related decisions that they would need to make. And here they can see that these might have impact on their hiring, these might have impact on their design and R and D as well.
Part 2 is worth 5 points total. Points are only given for correct/reasonable answers in the manner specified below; incorrect/unreasonable answers get zero points.
- 0 pts No answer, or irrelevant answer
- 1 pt Superficial mention of one process design aspect or operations strategy concept applicable to the question
- 2 pts One specific process design aspect or operations strategy concept correctly covered in the answer, with specific connection to the context of the case
- 3 pts Superficial mention of another (beyond the one mentioned for first 2 points) process design aspect or operations strategy concept applicable to the question
- 4 pts Two specific process design aspects or operations strategy concepts correctly covered in the answer, with specific connections to the context of the case
- 5 pts Appropriate tie back to the larger problems of the company
Part 3
Discuss other solutions for consideration that would require a shift in overall business strategy.
As they want to be in the market on their own terms. They could have 2 choices that they could have come up with. One is either they could focus on the customized and said this is what we're good at. and they could say that they don't really want to get into that standard product market and they will go after different customers who care about this customization. and they can move away from their current customers who are getting into high volume and go find a different a niche, a market that cares about what they are good at. So that would preserve their core competencies. They could continue to offer what they're offering, and then they would have to work with business strategy as well as their marketing strategy folks to see if that's something that everybody agrees with and that they can go after in an aligned fashion. So that would be important if they were to decide on this kind of a focus going forward. Another focus that they could have, an alternative focus, the opposite extreme of the customized would be completely give up on the customize and focus only on the standardize. So no breaking up the process as from being a job shop to a plant within a plant or combining two different types of processes but completely going after the high volume market which would require a drastic change in terms of not only the production process but also as it says here, their purchasing, their scheduling, their technology, and the people. So this would be in some sense a bigger risk getting into a market that they may not be very familiar with. But this is certainly something that they would consider as being a choice that that they have to make.
Part 3 is worth 5 points total. Points are only given for correct/reasonable answers in the manner specified below; incorrect/unreasonable answers get zero points.
- 0 pts No answer, or irrelevant answer
- 1 pt Superficial mention of one process design aspect or operations strategy concept applicable to the question
- 2 pts One specific process design aspect or operations strategy concept correctly covered in the answer, with specific connection to the context of the case
- 3 pts Superficial mention of another (beyond the one mentioned for first 2 points) process design aspect or operations strategy concept applicable to the question
- 4 pts Two specific process design aspects or operations strategy concepts correctly covered in the answer, with specific connections to the context of the case.
- 5 pts Appropriate tie back to the larger problems of the company
4. Appendices
4.1 Documenting File Creation
version R version 3.3.0 (2016-05-03) system x86_64, mingw32
ui RTerm
language (EN)
collate English_United States.1252
tz Asia/Tokyo
date 2016-06-18
sysname release version nodename “Windows” “10 x64” “build 10586” “RSTUDIO-SCIBROK” machine login user effective_user “x86-64” “scibr” “scibr” “scibr”
4.2 Versions’ Log
4.3 Speech and Blooper
Instructions The purpose of this assignment is to give you the opportunity to apply the concepts you have learned in this module and to discuss some of the key ideas of the module in your own words. Follow the instructions provided and respond to each question. This a required activity for this module. Submit your answers to each of the questions based on the information provided below. Enter your answers directly in the spaces provided in the My submission tab. You may save a draft of your work as you go, and you can come back later to continue working on your draft. When you are finished working, click the Preview button, verify your identity, and then click Submit for review to submit the assignment. Please answer each question fully and concisely. The discussion of the assignment solution is provided in the Module 2 Assignment 2 Solution video. Do the assignment on your own first, before viewing the assignment discussion video! Watches Assembly Figure 1.1 : Assembly watches From above picture, we try to categorize 5 workstations to assembly a complated watch. For example: A line for final assembly of watches has 5 workstations with equal amount of work for the single worker at each station. The workers sit next to each other passing each watch to the worker at the next station as they are done. The workers are paid $15 per hour for the normal 7 hours of work per day. The line normally completes 300 watches per day. When everything works as planned (no errors and breakdowns) completing the expected daily quantity, what is the implied cycle time at each workstation? \[Ws = 5, Hrs = 7, Py = $15, Wc = 300\] \[Paid / unit = (Ws \times Hrs \times Py) / Wc\] \[Productivity / dollar = Wc / (Ws \times Hrs \times Py)\] \[Productivity / hour = Wc / (Ws \times Hrs)\] \[Paid / cycle = Hrs \times Py\] \[Productivity / cycle = Wc / (Ws \times Hrs)\] Table 2.1 Summarise table for productivity cycle. What is the total labor cost of assembly per watch when everything works as planned (no errors and breakdowns) completing the expected daily quantity? If the utilization for the line drops to 90% due to unplanned occurrences, how much extra time would be needed to complete the routine daily quantity of watches? Referring to Part 5 may help you address this question. The workers are paid a 50% premium for overtime work for up to 2 extra hours per day and which can be quantified in fractions of hours. What would be the total labor cost per unit based on completion of 300 units and including the overtime costs? \[Overtime Paid / hour = 1.5 \times Wager\] \[Wager / worker / day = 7 hours \times wager + overtime \times overtime wager\] Please list at least one critical assumption that is necessary in computing the additional time and cost. \[Max Wager / worker / day = 7 hours \times wager + 2 hours \times overtime wager\] I tried to write my answer above based on my understanding on the assignment prior to watch below video. I do say sorry since my Enlish language is not good. From the observation above, we can conclude that lower productivity efficiency will increase the labor cost. Below is the answer from my peer while I am not unserstand why Kindly refer to below answer provided by Professor. It’s useful to record some information about how your file was created. [1] “2016-06-08 01:00:31 JST” setting value Same as pevious assignment — Operations Management : Module 1 Assignment 1, I do appreciate that University of Illinois at Urbana–Champaign provides the management course via Coursera. I am a newbie in marketing, cost measurement and inventory management as well as whole operating chain. Keep up learning and hope to learn some management skills and knowledges from Operations Management.Operations Management : Module 2 Assignment 2
Improving Business Finances and Operations Specialization by University of Illinois at Urbana-Champaign
®γσ, Eng Lian Hu
白戸則道®2016-06-08
1. Introduction
2. Operational Concepts
Part 1
Category
Figure
Paid per Unit
1.7500000
Productivity per dollar
0.5714286
Productivity per hour per workstation
8.5714286
Paid per hour per cycle
75.0000000
Paid per day per workstation
105.0000000
Paid per day
525.0000000
Productivity per hour per cycle
42.8571429
Cycle time per unit
0.0233333
Productivity per workstation per day
60.0000000
Part 2
Part 3
Part 4
Part 5
3. Conclusion
The overtime = (42/60)hrs = 0.7hrs?Process metrics/cost implication
Part 1
A line for final assembly of watches has 5 workstations with equal amount of work for the single worker at each station. The workers sit next to each other passing each watch to the worker at the next station as they are done. The workers are paid $15 per hour for the normal 7 hours of work per day. The line normally completes 300 watches per day.
When everything works as planned (no errors and breakdowns) completing the expected daily quantity, what is the implied cycle time at each workstation?
Solution:
All things being equal, the implied cycle time is thus calculated:-
CT=1/R
Where CT = Cycle or process time || R= Flow rate
Then R= 300/(7*60)
Therefor CT= 7*60/300 = 1.4 Min.
Part 2
What is the total labor cost of assembly per watch when everything works as planned (no errors and breakdowns) completing the expected daily quantity?
Solution:
Pay for one (1) worker per day = 15*7 = $105
Total pay for five (5) workers per day = 105 * 5=$525
Total labor cost of assembly per watch= 525/300 = $1.75
Part 3
If the utilization for the line drops to 90% due to unplanned occurrences, how much extra time would be needed to complete the routine daily quantity of watches? Referring to Part 5 may help you address this question.
Solution:
300 watches per day (7hrs) at 100% utilization.
At 90 % utilization, we have 90/100 * 300 = 270 watches
Time to produce 30 (300-270) watches = 30/300 * 420 = 0.1 * 420 = 42 Min or 0.7hrs
Part 4
The workers are paid a 50% premium for overtime work for up to 2 extra hours per day and which can be quantified in fractions of hours. What would be the total labor cost per unit based on completion of 300 units and including the overtime costs?
Solution:
The overtime = (42/60)hrs = 0.7hrs
Overtime pay for one (1) worker at 100% utilization
= (0.7 *15) + (0.7 *15 * 50/100) = 10.5 + 5.25 = $15.75
Total overtime paid to 5 workers = 15.75 * 5 = $78.75
Therefore, be the total labor cost per unit based on completion of 300 units and including the overtime costs
= (525 + 78.75)/300 = 603.75 /300 = $2.0125
Is the correct answer given?
Part 5
Please list at least one critical assumption that is necessary in computing the additional time and cost.
100% utilization during overtime all things being equal.
4. Appendices
4.1 Documenting File Creation
version R version 3.3.0 (2016-05-03) system x86_64, mingw32
ui RTerm
language (EN)
collate English_United States.1252
tz Asia/Tokyo
date 2016-06-08
sysname release version nodename “Windows” “10 x64” “build 10586” “RSTUDIO-SCIBROK” machine login user effective_user “x86-64” “scibr” “scibr” “scibr”
4.2 Versions’ Log
4.3 Speech and Blooper
4.4 References
Instructions The purpose of this assignment is to give you the opportunity to apply the concepts you have learned in this module and to discuss some of the key ideas of the module in your own words. Follow the instructions provided and respond to each question. This a required activity for this module. Submit your answers to each of the questions based on the information provided below. Enter your answers directly in the spaces provided in the My submission tab. You may save a draft of your work as you go, and you can come back later to continue working on your draft. When you are finished working, click the Preview button, verify your identity, and then click Submit for review to submit the assignment. Please answer each question fully and concisely. The discussion of the assignment solution is provided in the Module 3 Assignment Solution video. Do the assignment on your own first, before viewing the assignment discussion video! Bintu Fehrenbacher owns five kiosks in the Mall of America in Minneapolis, Minnesota. Every 13 weeks, she orders 2,600 smartphones for combined sales in her kiosks. She has recorded weekly sales for the last two years (52 weeks per year), and this data is available to you in the following table. Bintu incurs a cost of $200 every time she places an order. Her average cost of each smartphone is $50. Her cost of capital is 11%. She incurs an additional insurance cost of 1 cent per week for every phone in inventory. Data for two years (also available in the Module3_Assignment_Data.xlsx spreadsheet): Table 1.2.1 : Weekly sales table of Bintu Fehrenbacher’s kiosks. Graph 1.2.1 : Weekly sales graph of Bintu Fehrenbacher’s kiosks. Based on Bintu’s ordering policy, what is her total annual cost associated with inventory? Annual Total Summary Table 2.1.1 : Annual Summary Below is a table which breakdown the seasonal orders which are 13 weeks once. Table 2.1.2 : Sessonal Summary \[total\ annual\ cost = orderding\ cost + inventory\ holding\ cost + insurance\ cost\] Equation 2.1.1 : Economic Order Quantity (EOQ) \[C = \frac{2,600 units}{2}(\$50 \times 11\% + \$0.01 \times 52 weeks) + \frac{10,400 units}{2,600 units}(\$200)\] Therefore annual cost (exclude other cost which has not given in the question) will be $8626. You can using calculator for inventory cost via Total Inventory Cost. Compute the EOQ. What is an ‘Economic Order Quantity - EOQ’? An economic order quantity (EOQ) is an inventory-related equation that determines the optimum order quantity that a company should hold in its inventory given a set cost of production, demand rate and other variables. This is done to minimize variable inventory costs. The full equation is as follows: Economic Order Quantity (EOQ) \[EOQ = \sqrt{\frac{2SD}{PI}}\] where : Equation 2.2.1 : Economic Order Quantity (EOQ) Read more: Economic Order Quantity (EOQ) Definition | Investopedia You can also read ECONOMIC ORDER QUANTITY (EOQ) MODEL: Inventory Management Models : A Tutorial with example to know that cost of product is not in count. Equation 2.2.2 : Economic Order Quantity (EOQ) Now we try to given the value for every single parameter/variable. The optimal order quantity is EOQ = 831.2820823 units. What is her total annual cost associated with inventory using EOQ? Total Relevant Cost (TRC) \[Total\ Relevant\ Cost\ (TRC) = Yearly\ Holding\ Cost + Yearly\ Ordering\ Cost\] Equation 2.3.1 : Total Relevant Cost Graph 2.3.1 : What would holding and ordering costs look like for the years? ** Relevant because they are affected by the order quantity Q Total Relevant Cost (TRC) = $5003.47 Where you can refer to Economic Order Quantity Models for more details. If there is a lead time of two weeks for smartphones, and given that the standard deviation of demand is 29, what would be the reorder point for a cycle service level of 90% (safety stock service factor = 1.28) using the continuous review inventory management system? Graph 2.4.1 : Sample of reorder point Graph 2.4.2 : Sample of reorder point calculation Equation 2.4.1 : reorder point R = 452.4956074 units. State the decision rules for Bintu if she now follows a continuous review inventory policy based on your computations. Bintu should reorder (EOQ) 831 units when the stocks balance reach (ROP) 452 units. Base from the dataset which we initially don’t know the stocks balance, however we measure the optimal reorder point as well as the reorder size for Bintu. It’s useful to record some information about how your file was created. [1] “2016-06-11 03:08:28 JST” setting value Same as pevious assignment — Operations Management : Module 1 Assignment 1, I do appreciate that University of Illinois at Urbana–Champaign provides the management course via Coursera. I initially don’t know how to calculate the reorder point and reorder size from the video solution. However I had searched and read the relevant articles to know the concepts and the formulas. I am a newbie in marketing, cost measurement and inventory management as well as whole operating chain. Keep up learning and hope to learn some management skills and knowledges from Operations Management.Operations Management : Module 3 Assignment
Improving Business Finances and Operations Specialization by University of Illinois at Urbana-Champaign
®γσ, Eng Lian Hu
白戸則道®2016-06-11
1. Introduction
1.1 Instructions
1.2 Summary
2. Operational Concepts
Part 1
Week
Year.Before.Last
Last.Year
Sess
Insurance
52
10400
10400
All
0.52
Part 2
Part 3
Part 4
Part 5
3. Conclusion
4. Appendices
4.1 Documenting File Creation
version R version 3.3.0 (2016-05-03) system x86_64, mingw32
ui RTerm
language (EN)
collate English_United States.1252
tz Asia/Tokyo
date 2016-06-11
sysname release version nodename “Windows” “10 x64” “build 10586” “RSTUDIO-SCIBROK” machine login user effective_user “x86-64” “scibr” “scibr” “scibr”
4.2 Versions’ Log
4.3 Speech and Blooper
mPlot(x = 'Week', y = c('Year Before Last', 'Last Year'), type = 'Line', data = dat) facing connection error to read the data with RMarkdown but working fine if run via chunk.googleVis::gvisLineChart() only shows Edit me! but no graph.
4.4 References
Instructions The purpose of this assignment is to give you the opportunity to apply the concepts you have learned in this module and to discuss some of the key ideas of the module in your own words. Follow the instructions provided and respond to each question. This a required activity for this module. Submit your answers to each of the questions based on the information provided below. Enter your answers directly in the spaces provided in the My submission tab. You may save a draft of your work as you go, and you can come back later to continue working on your draft. When you are finished working, click the Preview button, verify your identity, and then click Submit for review to submit the assignment. Please answer each question fully and concisely. The discussion of the assignment solution is provided in the Module 4 Assignment Solution video. Do the assignment on your own first, before viewing the assignment discussion video! For this assignment you will need the data in these spreadsheets: Customers of Health Freaks Natural Foods Supplies have recently complained about underweight bags of their breakfast cereal. The 500-gram bags are manually filled at the end of the mixing line using a pourer and an electronic weighing scale that adjusts for the empty weight of the super thick bags made from biodegradable natural material used for the packaging. The quality control manager for the plant, Jim Stokowski, has begun looking into the issue. He has collected data from the filling process over five days. For each of the two shifts that the line is in operation, Jim has sampled ten bags each at five regular intervals; so, \(5 days \times 2 shifts \times 5 sampling times \times 10 bags\). As Jim did not want to rule out any potential factor including variation in weight of empty bags as an issue at this stage of his investigation, he carefully weighed just the cereal after tearing open the bags and recorded the data. For each of the fifty 10-bag samples, Jim computed the sample-average and recorded the smallest and largest values in each sample. That data is located in the Module4_Assignment_Table1.xlsx spreadsheet. The raw data from which these averages and sample-smallest and largest values were extracted are also available to you in the Module4_Assignment_RawData.xlsx spreadsheet. Jim’s hunch is that the more recently started second shift may have some issues. Based on this data, for Parts 1-4, please check whether the process is in statistical control, computing the limits for R and X-bar charts for shift 1 and shift 2 (control chart constants for R and X-bar charts are provided in in the Module4_Assignment_Table2.xlsx spreadsheet) and comparing the sample averages and ranges for each shift with their respective limits. You need not draw the two sets of R and X-bar control charts. Then, for Part 5, based on the information that you have here and your data analysis, how would you characterize the performance of the process in the two shifts, and what would you do next? Table 1.2.1 : Daily data of the weight of breakfast cereal. Table 1.2.2 : R Chart and X-bar of the weight of breakfast cereal. Table 1.2.3 : Control chart of the weight of breakfast cereal. Table 1.2.4a : Data summary of daily weight control Table 1.2.4b : Data summary of daily weight control Graph 1.2.1 : Data plot of the observations. Graph 1.2.2 : Data plot of the observations. Graph 1.2.3 : R and X-bar control charts. You can casually change above chart type by click the Edit Me!. Compute the limits for the R chart for shift 1. Interpret the control chart by comparing the sample ranges to the control limits. Table 2.1.1 : Data summary of R and X-bar control charts. \[Center Line (Shift 1) = \sum_{i=1,2..}^{n}\frac{Largest_{i} - Smallest_{j}}{n}\] Therefore, the Center Line for Shift 1 = 34.6576 grams. The article mentions that 10-bag samples per sampling1 For the daily sample size, you can see from Table 1.2.1 has column Table 2.1.2 : 10 sample size of LCL and UCL. Here we summarise it as 34.6576 grams is the center line for total 25 sample size and the weight range will falling between 7.7286448 grams and 61.5865552 grams. Compute the limits for the R chart for shift 2. Interpret the control chart by comparing the sample ranges to the control limits. By refer to above Table 2.1.1 and Table 2.1.2, we know that : Therefore we conclude that based on the 25 sample size, Center Line for Shift 2 = 34.4916 grams and the weight of cereal bags are vary within the range 7.6916268 grams to 61.2915732 grams. Compute the limits for the X-bar chart for shift 1. Interpret the control chart by comparing the sample means to the control limits. The average of weight of all 25 samples will be 500.2244 grams and from the lowest 489.5498592 grams to the higest 510.8989408 grams. Graph 2.3.1 : Weights of cereal bags. Base from Graph 2.3.1, we observed the average and the range of cereal bags’s weights. From Table 1.2.1 we can count that 178 among 300 samples have lower weight than center line. Compute the limits for the X-bar chart for shift 2. Interpret the control chart by comparing the sample means to the control limits. The average of weight of all 25 samples will be 481.796 grams and from the lowest 471.1725872 grams to the higest 492.4194128 grams. Base from Graph 2.3.1, we observed the average and the range of cereal bags’s weights. From Table 1.2.1 we can count that 166 among 300 samples have lower weight than center line. Based on the information that you have here and your data analysis, how would you characterize the performance of the process in the two shifts, and what would you do next? From Table 2.1.1, we can observe that the ranges of both shift 1 and also shift 2 are almost similar but they are quite high which are 6.9284105 and 7.1589635. However shift 2 has 7.1589635 different range base on mean value 481.796 is consider greater under-fills compare to shift 1. As concluded in Part 5, from Table 2.1.1, we can observe that the ranges of both shift 1 and also shift 2 are almost similar but they are quite high which are 6.9284105 and 7.1589635. However shift 2 has 7.1589635 different range base on mean value 481.796 is consider greater under-fills compare to shift 1. It’s useful to record some information about how your file was created. [1] “2016-06-13 02:02:01 JST” setting value Same as pevious assignments in Operations Management, I do appreciate that University of Illinois at Urbana–Champaign provides the management course via Coursera. I initially don’t know how to calculate the reorder point and reorder size from the video solution. However I had searched and read the relevant articles to know the concepts and the formulas. I am a newbie in marketing, cost measurement and inventory management as well as whole operating chain. Keep up learning and hope to learn some management skills and knowledges from Operations Management.Operations Management : Module 4 Assignment
Improving Business Finances and Operations Specialization by University of Illinois at Urbana-Champaign
®γσ, Eng Lian Hu
白戸則道®2016-06-13
1. Introduction
1.1 Instructions
1.2 Summary
2. Operational Concepts
Part 1
X1 until X10. total sample size \(n\), you can just subset/filter the column Shift inside Table 1.2.1 and Table 1.2.2 which is (5 times sampling per day * 5 weekdays) 25 observations., therefore :
Part 2
Part 3
Part 4
Part 5
3. Conclusion
4. Appendices
4.1 Documenting File Creation
version R version 3.3.0 (2016-05-03) system x86_64, mingw32
ui RTerm
language (EN)
collate English_United States.1252
tz Asia/Tokyo
date 2016-06-13
sysname release version nodename “Windows” “10 x64” “build 10586” “RSTUDIO-SCIBROK” machine login user effective_user “x86-64” “scibr” “scibr” “scibr”
4.2 Versions’ Log
4.3 Speech and Blooper
rCharts::nPlot() and rCharts::hPlot() occurred some unonymous errors since it is working fine if run via chunk but show nothing when knitted.googleVis::gvisLineChart() only shows Edit me! but no graph in local but published is working fine.